Correlation Between Diamond Building and Intouch Holdings
Can any of the company-specific risk be diversified away by investing in both Diamond Building and Intouch Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Diamond Building and Intouch Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Building Products and Intouch Holdings Public, you can compare the effects of market volatilities on Diamond Building and Intouch Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Diamond Building with a short position of Intouch Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Building and Intouch Holdings.
Diversification Opportunities for Diamond Building and Intouch Holdings
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Diamond and Intouch is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Building Products and Intouch Holdings Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intouch Holdings Public and Diamond Building is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Diamond Building Products are associated (or correlated) with Intouch Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intouch Holdings Public has no effect on the direction of Diamond Building i.e., Diamond Building and Intouch Holdings go up and down completely randomly.
Pair Corralation between Diamond Building and Intouch Holdings
Assuming the 90 days trading horizon Diamond Building Products is expected to generate 0.4 times more return on investment than Intouch Holdings. However, Diamond Building Products is 2.49 times less risky than Intouch Holdings. It trades about -0.12 of its potential returns per unit of risk. Intouch Holdings Public is currently generating about -0.12 per unit of risk. If you would invest 790.00 in Diamond Building Products on August 25, 2024 and sell it today you would lose (15.00) from holding Diamond Building Products or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Building Products vs. Intouch Holdings Public
Performance |
| Timeline |
| Diamond Building Products |
| Intouch Holdings Public |
Diamond Building and Intouch Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Building and Intouch Holdings
The main advantage of trading using opposite Diamond Building and Intouch Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Building position performs unexpectedly, Intouch Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Intouch Holdings will offset losses from the drop in Intouch Holdings' long position.| Diamond Building vs. PTT Public | Diamond Building vs. PTT Exploration and | Diamond Building vs. The Siam Cement | Diamond Building vs. CP ALL Public |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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